How a Bulgarian scheme scammed Spotify for $1M

A scamming operation in Bulgaria managed to grab away as much as $1 million in royalties out of Spotify last year, according to sources mentioned in a report .

The Bulgarian entity, which hasn’t been identified, pulled off the feat reportedly by uploading several third-party playlists of songs, creating a flurry of fake Spotify accounts to boost their play counts, and reaping the cash rewards out of the music-streaming company’s percentage-based payoff system.

A major-label executive first spotted the unusual activity in September 2017 in Spotify’s regular revenue roundups sent out to the industry, according to the report—but it was already too late.

Sometime last year, two playlists were uploaded to Spotify with music that can be traced back to ISRC codes (the international system to identify music and music videos) to an operation in Bulgaria.

They rocketed up in Spotify’s weekly global playlist charts, which keeps tabs on the playlists bringing in the most revenue. The playlists featured around 500 songs with only 1,200 listeners apiece. Most of the tracks were 30 seconds long—suspicious, considering that’s exactly the minimum amount of time a song must be listened to before Spotify registers a single “play.”

In terms of followers, they could have been real, but the fascinating fact is how the Bulgarian group or individual created 1,200 paying accounts and played 500 tracks, at a random loop. In numbers, this means 1,200 times $9,99 = $12,000 per month, which means it was an expensive operation as well.

Spotify’s average per-track payout is $0.004 per play, so if 500 30-second songs are set to play on an automatic 24/7 loop for one month, that’s 72 million plays in that period—or $415,000 a month.

Music Business Worldwide’s sources estimate the scam ran for four months before industry officials alerted Spotify, which deleted most of the playlists’ tracks. Spotify says it is “improving methods of detection and removal”; short of manually screening every single of the 30 million tracks on its catalog, though, there’s no obvious way this can be done thoroughly and consistently.

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